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Saturday, 18 February 2017

Gurgaon builders reduce apartment size to make them more affordable, revive demand

Traditionally, Gurgaon’s
apartments range in area from 1,800 to 6,000 square feet, according to Surabhi
Arora, a senior associate director at Colliers International India, a real
estate consultancy.

GURGAON: The days of large, swanky flats in Gurgaon may be
taking a back seat for a while.Real
estatedevelopers are reducing
the size of apartments to make them more affordable and prop up the housing
market in the satellite town, where slowing sales have been made worse by
demonetisation.

Traditionally, Gurgaon’s apartments range in area
from 1,800 to 6,000 square feet, according to Surabhi Arora, a senior associate
director at Colliers International India, a real estate consultancy. “In the
recently launched projects, the area of apartments is anywhere between 1,100 to
1,600 sq. ft.,” Arora said.

According to brokers, the prices of these smaller
apartments vary from Rs 60 lakh to Rs 1 crore. Over the past year, developers
have trimmed apartment sizes, claiming they’re launching a different category.

At Tata Housing’s Tata La Vida located off the
Dwarka Expressway, there are two- and three-bedroom apartments with areas from
1,276 to 1,579 sq. ft. At Supertech Azalia in Sector 68 on Sohna Road, the
flats come in two sizes: 1,020 and 1,225 sq. ft. M3M’s Sierra in Sector 68
offers seven types of flats, ranging from 1,197 to 1,545 sq. ft., and ILD’s GSR
Drive in Sohna has units ranging from 985 to 1,335 sq. ft.

“Smaller-sized units have become popular due to
affordability factor and changing profile of home buyers,” said RK Arora,
chairman of Supertech Ltd. “The trend for smaller units is likely to continue
as families become smaller and more single working individuals buy property.
Further, it is much easier to maintain small-sized apartments even as builders
offer a wide range of facilities even with such units, including parking space,
clubhouse and swimming pools.”

The growing popularity of smaller apartments ties
in with the government’s emphasis onaffordable
housing. The finance minister proposed in the budget earlier this month to
grant infrastructure status to affordable housing, which will allow developers
to borrow funds at a lower cost.

“The time ahead will be completely dominated by
the affordable housing segment as the government has also stressed towards
diminishing the shortage of over 2 crore housing units in the country,” said
Pradeep Aggarwal, chairman of Signature Global Group, a Gurgaon-based
developer. “New project launches have shifted mostly towards the affordable
housing segment supporting the Housing for All mission.”

The sale ofresidentialproperty in Gurgaon plunged to about
half of the peak numbers in 2016, while new launches, too, declined. Only 6,700
units were launched last year, which is one-third the level in 2015, according
to a report by Colliers International India.

Delays in completion of projects and lack of
infrastructure development in emerging corridors such as the Dwarka Expressway
– another road linking Gurgaon and New Delhi – adversely impacted demand. The
central government’s demonetisation move, scrapping Rs 500 and Rs 1,000 notes
in November, made the situation worse. Transactions almost came to a halt in
the last two months of 2016.

Speculators who fuelled demand during the peak
times have all but disappeared from the residential market due to the fall in
the percentage of their profit in the resale market. Those remaining are
end-users.

“Before demonetisation, we were looking at a 65:35
ratio between end-users and investors. That changed to 90:10
post-demonetisation,” said Avneesh Sood, a director at Eros Group.

In the past couple of years, slowing sales have
brought drown prices by about 10% in Gurgaon. Even after discounts and incentives
offered by developers, buyers have kept away. Traditionally known as a luxury
real estate destination, Gurgaon has a high supply of units with a price tag of
Rs 1 crore and above. End-users comprising middle-class and service-class home
buyers find such high property prices out of their reach.